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FBN’s Charlie Gasparino on the factors that may lead to further sales and mergers of financial service companies.
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It is buzzing over the possible leveraged -- added well the real action acres telling Charlie -- assume it'd be and the financial services sector.
Just like exclusively.
I don't think this with a big banks -- -- WC Morgan Stanley JPMorgan -- which could bring back old house of Morgan.
But you're gonna see.
Now talking to bankers okay these are bankers that pushed these so.
Take -- for what it's worth but they usually on the cutting edge of the stuff and he's back is that telling me.
That there are going to be is going to be significant deals in the financial services industry when they're pushing them and the reason why low interest rates right.
And borrow cheaply Dodd-Frank cost well guess what all the banks have -- and that the cut costs.
And the loss of and and then this and then what you see is lower trading volumes people the average investor really isn't in the market.
Put all that together.
And you know that's it -- that's a situation that's what you have right now in financial services.
That's ripe for consolidation and here's some of the names regional banks like truck suntrust PNC Regions Financial.
Could be sold -- -- because those conditions.
Low retail trading volumes could be there could put Ameritrade.
E*Trade on the block kind of interest in right those are firms that deal primarily with the small investor trading stocks as we know.
Money is flowing and we still recently out of stock mutual funds does not a lot of trading -- -- among individual investors.
Top of that you have low trading volume.
Plus interest rates low interest rates put trust banks like Mellon and State Street potentially on the back on the on the block.
And then when you hear about eurozone problems right you know there's there's a financial crisis in Europe -- are muddling true but it's occurring.
Troy invasion -- -- that's pushing.
That's that's that troubles pushing foreign banks to possibly spin off.
They're US subsidiaries.
Something like do we -- asset management is something that I've been here for like months and months -- maybe year.
But that apparently is one of the names you here HSBC may spin off its credit card unit but that's what we see right now now like I said.
I'm not saying that these banks are particularly in -- what I'm saying is this bankers at the big Wall Street firms are definitely.
Definitely approaching these players saying you should do we deal they are listening.
And when you put it all together.
You know the macro the macro scenario I laid out.
Increase regulations eurozone problems low trading volume low interest rates so you can borrow cheaply.
Well guess what happens you know or and will -- because you know you don't make enough money in the -- problems Morgan Stanley has.
And other banks have when you have launched original make a lot of money on your investments you put all that together.
Credit markets that's hospital legal Indian that's it that's another little salt and maybe also let.
I wouldn't put all together and you have a situation that's ripe for mergers.
And you know.
Listen I don't know if you -- gonna -- -- Ameritrade.
But is there really -- for two.
Right now.
Now I'm -- -- and so that's it was originally you're talking about have actually been I mean they traded higher in 2012 just like the big guys did.
You know because -- was so much deals going on that they were actually lending -- making profits.
You can make more powerhouses.
Right medium -- -- so PNC.
And and son and suntrust and regions those are all.
State Street you know State Street is that is an interest in bank because I -- -- they removed the market to buy something.
I heard they were in the market to buy that the society Generale.
The I can't remember the name of the the brokerage firm that was really designed Generale is here in the US and its Larry MacDonald our friend works there.
But I forgot the US UH IQ thank you think so but but I hired that was not the case -- not gonna do that but I hear there in the cross hairs of this merger activity.
Maybe they buy something of near equal size -- a -- retain control.
But you know there's -- there's clearly.
It is if it is here to do deals and I think we're gonna see that coming very very short money is there Charlie Gasparino thank you very much right.
